Hacked Accounts on Crypto Exchanges Rose 369% in 2017, Research Finds

New research has found that crypto hacks are increasing, with a majority of criminal activity originating from the U.S., according to International cybersecurity firm Group-IB.

Poor Security Measures

According to Group-IB, hacked accounts rose 369 per cent in 2017 compared to the previous year, with 720 usernames and passwords stolen across 19 of the top exchanges, reports The Next Web.

The data suggests that it is down to inadequate security measures and a lack of two-factor authentication (2FA), which has resulted in a profitable venture for criminals.

The country with the highest amount of affected cryptocurrency users was the U.S. at 34.3 per cent. Countries grouped under the “Other” category came in at 11.1 per cent, followed by the Russian Federation with 10.5 per cent, and China scoring five per cent. Turkey had the lowest amount of affected users with 2.4 per cent.

Of the 720 accounts that were compromised, one in five had passwords in place with less than eight characters. Unsurprisingly, this makes light work for potential hackers intent on stealing the funds of others.

According to a June report at NewsBTC, Rick McElroy, the security strategist at Carbon Black, said some new investors were unaware that there were no banks or institutions providing security for people using cryptocurrency. It was further highlighted that in the first six months of 2018, crypto cyber thefts amounted to over $1.1 billion.

Malicious Malware Originates from the US

Ransomware is also becoming an increasingly used method among criminals. The data from Group-IB went on to state that the use of cryptocurrency malware is coming from the U.S., accounting for 56.1 per cent. This was followed by the Netherlands at 21.5 per cent.

Notably, with interest rising in the cryptocurrency market, so too is the sophistication of malware attacks and exchange hacks. Countless incidents have been reported on involving malware. Back in June, an app called ADM.Miner was found on Android devices, which was using the hardware to mine cryptocurrency.

Malware found on Mac computers, known as “mshelper,” has also been making the rounds, draining CPU time as it mines for Monero.

These, however, are just a few incidents. According to Ruslan Yusufov, Director of Special Projects at Group-IB, rising fraudulent activity and increasing attention from criminals, in addition to a significant amount of funds already stolen, highlights that “the industry is not ready to defend itself and protect its users.”

“In 2018 we will see even more incidents,” he added. “The dark side of the crypto industry requires a response from the community, including researchers, scholars and the academia.”